Even after posting a smaller-than-expected quarterly loss, German auto making giant Daimler has announced that it would stop manufacturing Mercedes-Benz sedans in the United States and Mexico with the aim of further deepening its cost saving strategy.
Output of its Mercedes-Benz C-Class sedan in Tuscaloosa, Alabama was announced by the German automaker to be halted which means that these factories will only be manufacturing only the sport utility vehicles of the company.
Daimler will also stop the manufacturing of a variant of compact Mercedes-Benz A-Class in Aguascalientes, Mexico, and the production unit will instead be focusing on producing the GLB, a newer, a SUV model that yields higher margins for the company.
These changes were announced by the company as it reported its second quarter operating loss of 1.68 billion euros ($1.91 billion) on Thursday, just prior to the schedule data of release of the results on July 23.
"Daimler pre-released better-than-consensus second-quarter numbers," Jefferies analyst Philippe Houchois said in a note.
The news pushed the shares of the company up by 4.2 per cent on Friday.
According to the company, an operating loss of 1.13 billion euros was reported by the Mercedes-Benz Cars & Vans business even as the company is hit by a slump in demand as well as closure of factories and dealership because of lockdowns and other restrictions imposed to prevent the spread of the novel coronavirus pandemic across the world.
"Our systematic efforts to lower the breakeven of the company by reducing costs and adjusting capacity will need to continue,” Daimler CEO Ola Kaellenius said.
Previously, the company had announced its intention of divesting its factory in Hambach, France.
Share buyouts and early retirement schemes imposed by the company has cost it about million euros, Daimler said. A 105 million euro valuation adjustment on YOUR NOW, the car-sharing joint venture of the company, was also announced by it previously.
The costs of restructuring off its global production network of factories producing Mercedes-Benz cars by retooling them have also cost the company a total of 687 million euros, Daimler said.
Germany's Handelsblatt newspaper reported on Friday that the German company now aims to make an annual saving of about 2 billion euros by cutting down on staff, equivalent to more than 20,000 jobs.
Previously, the company had announced that it aimed to generate cost saving of more than 1.4 billion euros by reducing annual staff costs.
According to the report by Handelsblatt citing company sources, Daimler is also now considering whether to divest its manufacturing plant in Iracemapolis, Brazil. The report also added that the previously announced plans of the company to conduct an extension of its factory in Kekskemet, Hungary, was likely to be shelved too.
Handelsblatt reported that the company’s portfolio of niche cars, such as the coupe and convertible variants of its C-Class and E-Class, as well as the compact B-Class is also being reviewed by the carmaker.
There were however no comments available from Daimler about the details of potential cuts.
(Source:www.usnews.com)
Output of its Mercedes-Benz C-Class sedan in Tuscaloosa, Alabama was announced by the German automaker to be halted which means that these factories will only be manufacturing only the sport utility vehicles of the company.
Daimler will also stop the manufacturing of a variant of compact Mercedes-Benz A-Class in Aguascalientes, Mexico, and the production unit will instead be focusing on producing the GLB, a newer, a SUV model that yields higher margins for the company.
These changes were announced by the company as it reported its second quarter operating loss of 1.68 billion euros ($1.91 billion) on Thursday, just prior to the schedule data of release of the results on July 23.
"Daimler pre-released better-than-consensus second-quarter numbers," Jefferies analyst Philippe Houchois said in a note.
The news pushed the shares of the company up by 4.2 per cent on Friday.
According to the company, an operating loss of 1.13 billion euros was reported by the Mercedes-Benz Cars & Vans business even as the company is hit by a slump in demand as well as closure of factories and dealership because of lockdowns and other restrictions imposed to prevent the spread of the novel coronavirus pandemic across the world.
"Our systematic efforts to lower the breakeven of the company by reducing costs and adjusting capacity will need to continue,” Daimler CEO Ola Kaellenius said.
Previously, the company had announced its intention of divesting its factory in Hambach, France.
Share buyouts and early retirement schemes imposed by the company has cost it about million euros, Daimler said. A 105 million euro valuation adjustment on YOUR NOW, the car-sharing joint venture of the company, was also announced by it previously.
The costs of restructuring off its global production network of factories producing Mercedes-Benz cars by retooling them have also cost the company a total of 687 million euros, Daimler said.
Germany's Handelsblatt newspaper reported on Friday that the German company now aims to make an annual saving of about 2 billion euros by cutting down on staff, equivalent to more than 20,000 jobs.
Previously, the company had announced that it aimed to generate cost saving of more than 1.4 billion euros by reducing annual staff costs.
According to the report by Handelsblatt citing company sources, Daimler is also now considering whether to divest its manufacturing plant in Iracemapolis, Brazil. The report also added that the previously announced plans of the company to conduct an extension of its factory in Kekskemet, Hungary, was likely to be shelved too.
Handelsblatt reported that the company’s portfolio of niche cars, such as the coupe and convertible variants of its C-Class and E-Class, as well as the compact B-Class is also being reviewed by the carmaker.
There were however no comments available from Daimler about the details of potential cuts.
(Source:www.usnews.com)
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